Annual rental yields for apartments in Athens range from 5% to 12%, depending on the neighborhood and rental strategy. The historic center leads the way with returns of 8–12% on short-term rentals, while developing neighborhoods offer growth potential with returns of 6–9% from a combination of rental income and property appreciation.
Athens, the capital of Greece, continues to be a hot investment destination in the European real estate market. After years of economic crisis, the city has experienced an impressive recovery in recent years, making it an attractive destination for international investors. Athens is a large city comprising dozens of different neighborhoods—from the historic center, rich in archaeological sites, to the modern suburbs and up-and-coming neighborhoods. Each area offers a different investment profile, with significant differences in returns, risk levels, and suitable rental strategies. What is the expected profitability in the various neighborhoods?
The Economic Map of Athens: Significant Disparities in Returns Across Districts
Yields in the Athens real estate market vary significantly depending on geographic location. In the historic city center, in areas such as Plaka and Monastiraki, investors can achieve annual yields of 8–12% on short-term rentals, thanks to high tourist demand. Therefore, the option of investing in the Plaka neighborhood, for example, is an attractive option, with prices and requirements detailed below.
Emerging neighborhoods, such as Psiri and Kokaki, offer a different approach to investing. Here, the average return ranges from 7% to 10%. Purchase prices are more affordable—€2,200–3,800 per square meter for properties requiring renovation—allowing investors with limited budgets to enter a market with high growth potential. In Spolia, for example, purchase prices stand at around €1,900 per square meter for older apartments, creating high yield potential due to expected appreciation. However, rental demand in these areas is lower. Investors with a long-term investment horizon and an understanding of urban development can find excellent opportunities in Athens’ developing neighborhoods.
At the other end of the spectrum are luxury areas such as Vouliagmeni and Kifissia, where peak prices reach up to €15,000 per square meter for villas with sea views, and the yield is relatively low—4–6% on long-term rentals. While the yield is lower, so is the risk, and the affluent international clientele ensures stable demand. These areas are particularly attractive to investors seeking luxury properties with long-term value retention potential.
Average annual returns in key areas of Athens, as of 2025:
Comparison of Rental Strategies: Short-Term vs. Long-Term
One of the critical decisions facing an investor in investment apartments in Athens is choosing a rental strategy. The differences between short-term and long-term rentals are significant and have broad financial and managerial implications.
Short-term rentals through platforms such as Airbnb, for example, offer significantly higher potential returns—8–12% compared to 4.5–6% for long-term rentals. However, it requires much greater managerial involvement, involves significant cleaning and maintenance costs, and is subject to changing regulations and seasonal risk. All of this assumes you choose to manage the property yourself rather than through a company that handles property management.
Investors who have opted for short-term rentals face unique challenges: the need to regularly update the property, manage guest expectations, address online reviews, and navigate changing municipal regulations. In contrast, investors in long-term rentals enjoy predictable and steady income, less day-to-day involvement, and long-term relationships with tenants.
An examination of the local market reveals an interesting trend: while foreign investors previously preferred short-term rentals due to the high returns, many of them are now shifting to a mixed model—a combination of short- and long-term rental properties—to diversify risk and ensure a more stable income stream.
A numerical example illustrates the difference: An apartment in Athens priced at €120,000 can generate an annual income of approximately €7,800 through long-term rental (a gross yield of about 6.5%), compared to approximately €11,500 after expenses for short-term rentals (a net yield of approximately 9.5%).
Price Trends and Market Developments
The city's real estate market has undergone a remarkable transformation in recent years, with a growing trend toward higher rental yields.
Case Study
Someone who bought a 30-square-meter apartment in a new building in the Neos Kosmos neighborhood four years ago for about €87,000 would now find that the same apartment is worth about €145,000.
In other words, during those years, the property appreciated by approximately 16% annually, in addition to a net annual return of 10% from short-term rentals.
These figures are based on a rate of 70 euros per night, 70% occupancy, and 50% expenses.
Similar trends in terms of appreciation and short-term rental returns have also been observed in recent years in neighborhoods such as Aglaos.
Tax and Regulatory Implications: What Every Investor Needs to Know
The financial system in Greece is relatively favorable to foreign investors, especially compared to other European countries. The purchase tax is 3.09% of the property’s value, the rental income tax is progressive and ranges from 15% to 45% depending on income, and there is a capital gains tax exemption for up to three apartments per person. For Israeli investors, the tax treaty between Israel and Greece provides additional protection against double taxation and tax equalization.
However, regulatory trends are changing, and savvy investors are keeping a close eye on them. New restrictions on short-term rentals in certain areas prevent the issuance of new short-term rental licenses and are pushing investors to purchase apartments in new buildings where all units are fully managed as short-term rentals under licenses compliant with regulations, which continue to operate even under the new restrictions. Additionally, new building regulations in the suburbs may affect the attractiveness of certain areas.
The practical recommendation for investors is to work with a company that knows the local market and collaborates with a local tax advisor who is familiar with the finer points of the legislation, in order to develop a clear exit strategy as early as the planning stage. Understanding the local tax structure can save thousands of euros a year and maximize the net return on investment.
2021: Rapid post-COVID recovery, rising demand, average yield 5%-7%
2022: Jump in property prices, increase in yields, average yield 6%-8%
2023: Continued rise, exceptionally strong demand in tourist areas, average yield 7%-9%
2024: Stabilization at high levels, new projects, average yield 7%-10%
2025: Stable market, high yields mainly in short-term rentals, average yield 7%-10%
Looking Ahead: Trends in Growth and Technological Innovation
The outlook for real estate price growth in the coming years remains optimistic, with an annual increase of 5–7% projected, which encourages investors to view real estate investments in Greece favorably.
Other trends are influencing the market: rising demand for energy-efficient properties, which appreciate in value by up to 125% more than non-upgraded properties. Savvy investors are beginning to invest in energy upgrades for existing properties, taking advantage of available government grants.
Another significant trend is the growing demand for modern office spaces and co-working spaces, particularly in Northeast Attica and the southern suburbs. Investors who identify these developing commercial areas early on will be able to capitalize on this trend.
In summary, Athens offers a unique mix of relatively high returns relative to risk, with significant growth potential driven by infrastructure investments and its status as a leading tourist destination. Risk-tolerant investors can maximize returns in tourist areas, while those seeking stability will find interest in growing residential neighborhoods. The key to success lies in understanding the unique characteristics of each area and selecting the strategy that best fits each investor’s risk profile and financial goals.
*The information presented in this article, including price comparisons, market research, estimated returns, and future projections, is intended for general informational purposes only and does not constitute professional advice, financial advice, investment advice, real estate advice, an investment offer, or a substitute for personal advice provided by a qualified professional. The data presented, including future projections or estimated returns, is based on various sources of information, including estimates and simulations, and does not guarantee actual results.
